17 min

Strategy Focus: Low Volatility Investing and the Conservative Formula Excess Returns

    • Investing

The success of of the low volatility factor can be challenging to explain. Investing theory teaches us that to get an additional return, we need to take additional risk and if we reduce risk, our return should come down with it. But low volatility seems to defy that rule. In this episode, we look at the low volatility factor, how it is defined, and why it works. We also look at how the returns of low volatility can be enhanced by combining it with other factors, and take an in depth look at our Multi-Factor Investor strategy on Validea, which is based on the paper The Conservative Formula by Pim van Vliet, and how it puts that idea into action. 

We hope you enjoy the discussion. 

ABOUT THE PODCAST

Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.

SEE LATEST EPISODES

https://www.validea.com/excess-returns-podcast

FIND OUT MORE ABOUT VALIDEA

https://www.validea.com

FOLLOW OUR BLOG

https://blog.validea.com

FIND OUT MORE ABOUT VALIDEA CAPITAL

https://www.valideacapital.com

FOLLOW JACK

Twitter: https://twitter.com/practicalquant

LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094

FOLLOW JUSTIN

Twitter: https://twitter.com/jjcarbonneau

LinkedIn: https://www.linkedin.com/in/jcarbonneau

The success of of the low volatility factor can be challenging to explain. Investing theory teaches us that to get an additional return, we need to take additional risk and if we reduce risk, our return should come down with it. But low volatility seems to defy that rule. In this episode, we look at the low volatility factor, how it is defined, and why it works. We also look at how the returns of low volatility can be enhanced by combining it with other factors, and take an in depth look at our Multi-Factor Investor strategy on Validea, which is based on the paper The Conservative Formula by Pim van Vliet, and how it puts that idea into action. 

We hope you enjoy the discussion. 

ABOUT THE PODCAST

Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.

SEE LATEST EPISODES

https://www.validea.com/excess-returns-podcast

FIND OUT MORE ABOUT VALIDEA

https://www.validea.com

FOLLOW OUR BLOG

https://blog.validea.com

FIND OUT MORE ABOUT VALIDEA CAPITAL

https://www.valideacapital.com

FOLLOW JACK

Twitter: https://twitter.com/practicalquant

LinkedIn: https://www.linkedin.com/in/jack-forehand-8015094

FOLLOW JUSTIN

Twitter: https://twitter.com/jjcarbonneau

LinkedIn: https://www.linkedin.com/in/jcarbonneau

17 min